Congress fears deal will derail security
A British hedge fund is fighting to control the board of directors of CSX, which owns 21,000 miles of train tracks in the U.S. Jeremy Hobson reports Congress is looking into the matter as an issue of national security.
A freight train winds up a grade near San Bernardino, Calif. (David McNew/Getty Images)
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TEXT OF STORY
Scott Jagow: Congress is getting involved in a fight over who sits on the board of a major railroad company. The company, CSX, controls 21,000 miles of train tracks in the U.S. A British hedge fund called TCI wants to take control of CSX's board of directors. Jeremy Hobson has more.
Jeremy Hobson: TCI is shorthand for the Children's Investment Fund. The British fund gives some of its profits to children's charities.
But in a letter this week to the Treasury Department, several U.S. senators called TCI an "aggressive hedge fund from the Cayman Islands." The senators said an investigation is necessary to prevent a possible threat to national security.
Nancy McLernon at the Organization for International Investment says that's way over the top.
Nancy McLernon: Look, absolutely railroads are an important part of our infrastructure. But the issue at hand here has nothing to do with national security. TCI can't do anything on its own. That's the point. They are a minority investor. And that's all this is. This is a proxy fight.
A CSX spokesman said national security was not the company's concern. But he did say that TCI would cut capital investment and impede the growth of CSX. The two sides face off at a shareholder meeting later this month.
In Washington, I'm Jeremy Hobson for Marketplace.
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From Mobile, AL, 06/06/2008
Check out CSX-Sucks.com to find out just what the employees think of CSX and their current management!!!
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